An important objective of an audit is to assert a reliable opinion regarding the material accuracy of an entity's financial statements; thus, the role of an auditor is to provide a reasonable level of substantiation for that opinion. But reviewing every accounting operation of a company would be unrealistically time consuming. Similarly, reviewing a company's accounting operation cursorily would not yield a sufficient level of substantiation. Therefore, a trend in the accounting industry is toward risk-based auditing—determining the appropriate target areas and levels of substantive testing to be performed. Risk-based auditing typically involves asking questions to determine where potential risks may be located to inform the auditor about those areas where substantive testing may be preferred (e.g., taking a random sampling of transactions to see whether the aggregate of a random sampling matches up with the claim totals on a pro rata basis). To facilitate risk-based auditing, numerous methods, systems and computer-implemented programs have been developed.
For example, ProSystem fx Knowledge Tools™ (“Knowledge Tools”) was released by CCH, a Wolters Kluwer company, in April 2007 to help accounting firms comply with the American Institute of CPA's (“AICPA”) most recent Risk Assessment Standards. The Risk Assessment Standards were released in the first half of 2008, when the AICPA's Audit and Attest Team staff issued Twelve new Technical Practice Aids (“TPAs”) to assist auditors in implementing Statements of Auditing Standards 104-111 (more commonly known as the “Risk Assessment Standards”). These TPAs, which are non-authoritative, AICPA staff technical questions and answers, were developed in response to common questions received from AICPA members. For further information on the Risk Assessment Standards, see the AICPA's Web site.
Knowledge Tools was built upon the foundation provided by a software system for paperless workflow solutions, CCH's ProSystem fx® Engagement™ (“ProSystem Engagement”), as well as Microsoft® Office™, to combine advances in technology and audit methodology. Knowledge Tools combines technology with Knowledge-Based Audit (“KBA”) methodology to give a user an integrated set of procedures from pre-engagement through evaluation, conclusion and reportage. It provides a strong framework to help the user manage industry-specific auditing standards and ensures that important information is not overlooked or hidden in the details of numerous checklists and forms.
The KBA methodology within Knowledge Tools and the new ProSystem fx Knowledge Coach provides an easy-to-use, tailored audit process that (i) enhances communication between team members and allows for the ongoing evaluation of procedures; (ii) enables audit team members to view summaries of the risks and findings via the communications hub during each stage of an audit; (iii) ensures consistency and standardization across all published documents; and (iv) incorporates work-flow features of ProSystem Engagement, including, for example, binder sharing and synchronization, integrated audit programs, checklists, reports and more. For further information on Knowledge Tools, available from CCH.
Despite the numerous benefits of Knowledge Tools, it would be highly advantageous to shift from a static audit content (e.g., content not associated with rules such as the content type currently employed in Knowledge Tools workpapers) to a dynamic system that allows a user to dynamically update documents based on, for example, modified data, rules, conditions, etc. Therefore, there is a need for a versatile system, method and/or apparatus that would enable the use of content to efficiently generate dynamic workpapers, reports and other documents. Such a system may be integrated with existing auditing tools—including, for example, Knowledge Tools—or used independently. Similarly, a system should be developed so that it could be applied to any system where dynamic content may be advantageous.